Will borrowers with rented solar panels have trouble remortgaging?
We investigate whether customers with solar panels are having difficulties getting a remortgage deal with a new lender.
I have contacted lenders to see if there is any truth to the rumours that they are rejecting customers who are are remortgaging to them from another provider, and who have already leased their roof to solar panel companies.
Lenders have been quite accepting of solar panels being installed on their existing customers' roofs, provided they get to agree the lease terms and the installation and maintenance meets certain standards.
However, on trying to remortgage to another lender at the end of a mortgage deal, at least one such customer has had a problem, according to a press report. When I asked lenders about this, 16 out of 20 got back to me within my deadline. Here's what they said:
Santander said it would consider such a mortgage so long as it meets the standards stipulated by the Council of Mortgage Lenders (CML). If the lease does not contain “appropriate provisions” or if Santander thought the installation unduly affected its security, it would turn down the mortgage.
See below for more on the CML standards.
Nationwide is one of the companies that has apparently refused a solar panel remortgage. However, Nationwide spokesperson Michelle Slade told me:
“Our process for solar panels is as follows: the conveyancer writes to the company who provides the solar panels to confirm the lease is acceptable to us... If the lease complies with the requirements laid out then the mortgage can proceed as normal.
“This letter is a CML-standard letter and one which we understand most [solar panel] leases would comply with. It is written with the intent of protecting both the borrower and the lender; for example it stipulates that the company is liable to repair, at their own expense, any damage to the property caused by them when installing, re-installing, maintaining and removing panels and associated equipment.”
I asked Nationwide if solar panel customers are offered the same deals as other customers, to which the answer was “Yes”.
HSBC and first direct
HSBC and first direct will agree to the remortgage so long as the solar panel provider sends the requested documentation, and you agree to follow the other terms of the policy.
Barclays and Woolwich
I received a short answer from Barclays about whether it, and its brand Woolwich, will offer remortgage deals to new customers with solar panel leases: “Yes”.
Lloyds, Halifax, Bank of Scotland and BM Mortgages
A spokesperson for Lloyds Banking Group said all its brands use the same rule: the decision regarding a mortgage will depend on the provider of the leased panels. Currently there are 75 approved providers, but the list is growing every week.
Royal Bank of Scotland and NatWest
A spokesperson told me the two banks follow CML guidelines, and that solar panel customers would be offered the same deals as everyone else.
Yorkshire Building Society, and Chelsea, Norwich & Peterborough and Barnsley building societies
A spokesperson for Yorkshire Building Society, which owns several other brands, gave me a list of points:
- Where the provider requests a long-term lease of the panels, these cases will be assessed individually by Group Legal so that the lease can be reviewed to assess whether it is acceptable.
- Installers must be registered with the Microgeneration Certification Scheme (MCS). This is an independent scheme, supported by the Department of Energy & Climate Change, for the certification of products and installers. Installation will require Building Regulations approval and MCS-registered installers may be able to self-certify installations.
- Planning permission may also be required in some cases.
- In all cases confirmation is required that the roof of the borrower’s property has been thoroughly checked by a structural engineer. The increased weight of the panels may require the roof structure to be strengthened.
The Council of Mortgage Lender standards
In a release, the Council of Mortgage Lenders recently wrote: “Recent press coverage of individuals encountering problems after agreeing to the installation of panels may have arisen because the lease does not comply with the CML’s standards, or individual lenders’ requirements.”
So it seems that the press might have sensationalised a non-story, would you believe? There are bound to be some people with solar panels who have their mortgages rejected, but it looks like those should be few and far between.
If you go with a major provider who follows the Council of Mortgage Lenders' standards, you will probably be alright.
Santander added: "The CML's standards also include provisions allowing a lender to terminate the leases and force removal of the panels in the event that the lender is obliged to repossess a property where an installation has been made.”
That's a strict standard, but I'm sure that there are many solar panel providers who include the provision. Make sure you check it out.
Other CML standards include:
- Ensuring the installation is fitted to an accredited standard.
- That the panels are properly maintained, with fees for repairs or maintenance not exceeding £60.
- That the lenders can have the panels removed without charge if the property is repossessed and the panels are making the property harder to sell, or impacting its sale price.
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